Articles Posted inArchitectural Control

The Governor has signed AB 634 into law changing HOA control over solar energy system (“Solar”) installations. HOAs may no longer adopt policies and guidelines that prohibit Solar installations on common area roofs protecting HOA property and homes from damage and members are stripped of the right to protect common area property by membership vote. HOA’s must conform to a statewide, one-size-fits-all Solar policy summarized here.

Establishing a solar energy system policy that prohibits condominium owners from installing solar panels on the common area roofs of condominium buildings or the owner’s adjacent garage/carport (exclusive use common area);

Requiring membership approval for an owner’s encroachment for Solar equipment on the common area.

Require survey to include equitable allocation of usable solar roof area for all owners sharing the roof/garage/carport;

Require owners/successive owners to be responsible for:

Costs for damage to any common area resulting from installation/maintenance/repair/removal/replacement of Solar installation;

Costs for maintenance/repair/replacement of Solar installation until its removal;

Restoration of all common area and separate interests after removal;

Disclosing the Solar installation to prospective buyers and all related responsibilities

Civil Code § 4600 now includes Solar installations as an exception to the rule requiring approval of 67% of members before the HOA can grant exclusive use of any portion of the common area to a member.

In light of AB 634, HOAs should have their legal counsel review their current architectural guidelines with respect to the installation of solar energy systems.

Is an HOA Board of Directors (“Board”) entitled to protection under the Business Judgment Rule (“BJR”) when it applies an unambiguous view restriction contained in the governing documents in a manner other than written?

RULE:

No. In Lingenbrink v. Del Rayo Estates Homeowners Association, 2017 WL 1075062 (“Lingenbrink”), the Court of Appeal concluded the BJR only applies to matters that are within an HOA Board’s discretion. A Board does not have the discretion to interpret or re-write a restriction where the meaning of the restriction is perfectly clear.

ANALYSIS:

The HOA consists of eighteen (18) “high end” homes in Rancho Santa Fe built on 21 lots, each with sweeping views of the Pacific Ocean. The CC&Rs contain very specific language that protects each Lot’s view as follows:

“No tree, hedges or other plant shall be so located or allowed to reach a size or height which will interfere with the view from any Lot and, in the event such trees, hedges or other plant materials do reach a height which interferes with the view from another Lot, then the Owner thereof shall cause such tree(s), hedge(s) or other plant material[(]s) to be trimmed or removed as necessary.”

On April 7, 2017, Governor Brown signed Executive Order B-40-17, ending the drought state of emergency in most of California. Drought restrictions will remain in effect in Fresno, Kings, Tulare, and Tuolomne counties, which continue to face drinking water shortages and diminished groundwater supplies. The new Executive Order rescinds the emergency proclamations from January and April 2014, along with four drought-related executive orders.

Over the last few years, the California legislature has passed several bills aimed at water conservation within community associations. AB 2100 amended Civil Code Section 4735 to prohibit associations from fining or threatening to fine an owner for failing to water vegetation or lawns during a state or local government-declared drought. SB 814 also authorized penalties for excessive residential water use during periods of government-declared droughts. Now that the state of emergency has been lifted, these laws are no longer in effect, provided the local jurisdiction has not declared a local drought.

AB 2104 further amended Section 4735 to restrict an association from prohibiting low-water using plants as a group, and AB 349 amended Section 4735 to restrict an association’s authority to prohibit artificial turf. Although the drought restrictions have been lifted, this legislation protects homeowners from having to reverse or remove any landscaping measures that were installed in response to the government-declared drought.

The State Water Resources Control Board (SWRCB) also adopted emergency regulations that subject associations to fines of up to $500 per day for violating the provisions of Section 4735. These regulations will remain in effect until November 25, 2017, or until they are modified or repealed by SWRCB.

The decision to lift drought restrictions was partly based on unprecedented water conservation. Californians saved more than 20% of urban water since the Governor mandated water use reductions in 2015. Despite the record levels of water conservation, the State cautions, “This drought emergency is over, but the next drought could be around the corner,” said Governor Brown. “Conservation must remain a way of life.”

Executive Order B-40-17 continues the provisions in the previous Executive Order, “Making Water Conservation a California Way of Life.” Permanent restrictions prohibit the use of potable water for:

hosing off sidewalks, driveway and other hardscapes;

washing automobiles with hoses not equipped with a shot-off nozzle;

using non-recirculated water in a fountain or other decorative water feature;

watering lawns in a manner that causes runoff, or within 48 hours after measurable precipitation; and

irrigating ornamental turf on public street medians.

The SWRCB will continue to plan for future droughts and promote water conservation as a way of life, which may result in more legislation.

Rural, equestrian, and large-scale planned developments may include properties with spacious lot sizes bordered by common area lots and open spaces. When property lines are not clearly delineated or easily identified in these communities, there may be instances where a homeowner seeks to expand his property by constructing yard improvements that extend beyond his property line and encroach onto adjacent, HOA-owned common area. If this is not discovered and addressed by the HOA in a timely fashion, there are avenues under California law through which the homeowner may assert that he has obtained an easement over (and in extreme circumstances, actual ownership of) the encroached area. The thought of a homeowner annexing common area for his/her own use is a scary thought, as is the prospect of the HOA failing to prevail in costly litigation that may be needed to reclaim its common area.

The Davis-Stirling Act promotes the nonjudicial resolution of disputes between homeowners associations (“HOAs”) and their members in various respects. One example is found contained in Civil Code Sections 5930 et. seq. which, in sum, require that the disputing parties to endeavor to resolve the dispute through Alternative Dispute Resolution (“ADR”) before a lawsuit is filed. ADR is essentially a form of mediation that uses a neutral third-party mediator (often a retired judge) to assist the parties in securing a mutually acceptable resolution.

Experienced HOA Board members, management professionals, and attorneys understand that ADR is often successful in resolving a dispute before it escalates to costly and protracted litigation. That resolution is typically memorialized in a written settlement agreement negotiated during ADR and executed by the parties. The settlement agreement often governs what actions must be taken by the parties within specified time frames. For example, in an architectural dispute, the settlement agreement may require the homeowner to take corrective measures (i.e., to modify or remove unapproved architectural improvements) within a specified time frame.

However, in some instances, a party to the settlement agreement may subsequently fail to honor its terms. The other party is then placed in a position of having to take legal action to enforce the other party’s compliance with the settlement agreement. The enforcing party may then have concerns regarding its ability to recover its attorney’s fees in taking such action. While the Davis-Stirling Act allows for a prevailing party in an action to enforce a HOA’s governing documents to recover its attorney’s fees, it is unclear whether enforcement of a settlement agreement reached at ADR constitutes such an enforcement action.

Many sets of HOA governing documents contain provisions that prohibit clotheslines from being hung outside of an owner’s unit and/or in any area that is visible from adjoining properties or HOA common area. AB 1448 (Lopez) was proposed earlier this year in order to limit the extent to which such provisions may be enforced. AB 1448 was based upon the belief that bans on clotheslines “prevent low-income families and energy-conscious persons from using a low-cost, low-technology energy conservation tool.” (Senate Floor Analyses, AB 1448 (09/08/15).)

AB 1448 sought to add new Civil Code Sections 1940.20 and 4750.10. Section 1940.20 would limit the degree to which landlords may prohibit the use of clotheslines or drying racks by their tenants, provided that certain conditions are met. Section 4750.10 would place similar limitations on HOAs by rendering void and unenforceable any provisions of a HOA’s governing documents that prohibit or unreasonably restrict an owner’s ability to use a clothesline or drying rack in an owner’s backyard.

On October 8, 2015, AB 1448 was approved and signed into law. As a result, effective January 1, 2016, “any provision of a [HOA’s] governing document…shall be void and unenforceable if it effectively prohibits or unreasonably restricts an owner’s ability to use a clothesline or drying rack in the owner’s backyard.” (Civ. Code § 4750.10(c).) However, as is typically the case with new legislation of this type, Civil Code Section 4750.10 will create additional questions that are not so easily answered with reference to the statutory language itself. Specifically, HOA Boards and management professionals will likely have questions concerning the following issues: (1) what qualifies as a “clothesline” or “drying rack,” (2) what area(s) must owners be permitted to utilize clotheslines or drying racks, and (3) what qualifies as a “reasonable restriction” on the use of a clothesline or drying rack that may still be imposed and enforced by a HOA. Some guidance on these issues is provided below…

In recent years the California legislature has proposed bills that would require homeowners associations (HOAs) to permit the installation of artificial turf (grass) in their communities. Those bills never made it into law, and were vetoed by the California Governor due to the Governor’s belief that “[t]he decision about choosing synthetic turf instead of natural vegetation should be left to individual homeowners associations, not mandated by state law.”

AB 349, proposed earlier this year, marked the latest attempt by the California Legislature to restrict the authority of HOAs to prohibit artificial turf. AB 349 was proposed as an urgency statute based upon the following rationale of the California Legislature:

“While in the middle of a water shortage crisis, homeowner associations are not allowing homeowners to make voluntary sacrifices and are still forcing them to maintain grass lawns, by installing artificial grass, and are fining them if they are out of compliance. [AB 349] ensures that all homeowners have the right to better conserve water by voluntarily replacing grass with artificial grass. Property owners who pursue water conservation by installing artificial grass should be encouraged, not sued or fined. Thus, this act is necessary for the immediate preservation of the public peace, health, and safety.”

The prolonged California drought has apparently lead to a reversal in the Governor’s position on this issue and AB 349 was signed into law on September 4, 2015. As a result, Civil Code Section 4735 has been amended to render void and unenforceable any provision of a HOA’s governing documents (i.e., a HOA’s architectural standards) that “prohibits, or includes conditions that have the effect of prohibiting, the use of artificial turf or any other synthetic surface that resembles grass.” (Civ. Code § 4735(a)(2).)

This language was modeled after similar protections already existing in Section 4735 for homeowners seeking to use “low-water using plants.” An additional amendment to Section 4735 as a result of AB 349’s passage includes the incorporation of new subpart (d) that protects homeowners from having to “reverse or remove” water-efficient landscaping measures that were installed in response to a government-declared drought period once the drought period concludes.

AB 349’s changes to the law take effect immediately as an urgency statute. HOA boards, architectural committees and management professionals must take note of the changes to Civil Code Section 4735. While AB 349 does not address what types of restrictions (as opposed to flat prohibitions) a HOA may place on the installation of artificial turf, HOAs should endeavor to amend their architectural standards in order to provide some guidance to homeowners on this issue and to deter the use of low quality turf materials.

Homeowners within condominium developments are typically granted broad authority in making improvements to the interior of their respective Units that do not require modification of association common area. However, because of the way in which condominium projects are built, certain improvements made within a Unit may ultimately impact the quiet use and enjoyment of neighboring homeowners (i.e., sound transmissions from hardwood or hard surface flooring). As indicated by the recent case of Ryland Mews Homeowners Association v. Munoz (2015) 234 Cal.App.4th 705 (“Ryland“), to the extent that a homeowner’s interior improvements result in a nuisance to neighboring homeowners, an association does have the authority to compel the homeowner to modify or remove the improvements as necessary to abate the nuisance…

Asked – Fallen and decayed vegetables from a homeowner’s garden are attracting numerous rats and other pests. With the new law permitting personal food gardens, is there anything our HOA can do to address this issue?

Answered – Probably. AB 2561, effective January 1, 2015, added Section 1940.10 and 4750 to the Civil Code. In sum, Section 4750 grants homeowners within HOAs the right to use their backyards for “personal agriculture,” regardless of any provisions contained in a HOA’s governing documents to the contrary. However, that right is not absolute. HOAs still have some authority to restrict and regulate personal food gardens in the following respects:

Personal Use/Donation Only – The crops must be grown for personal use or donation. Crops grown for sale or other commercial purposes do not fall within the definition of “personal agriculture” for the purposes of Section 4750.

No Marijuana or Unlawful Substances – There is no right for a homeowner to grow “marijuana or any unlawful crops or substances,” as those items do not constitute a “plant crop” permitted by Section 4750.

Only on Owner Property or Exclusive Use Common Area – The right to keep and maintain personal food gardens extends only to the owner’s backyard or areas designated for the exclusive use of the homeowner (i.e., exclusive use common area patios), not general HOA common areas.

Reasonable Restrictions Permitted – The HOA may still impose “reasonable restrictions” on the use/maintenance of homeowner’s yard for personal agriculture. “Reasonable restrictions” are those that “do not significantly increase the cost of engaging in personal agriculture or significantly decrease its efficiency.”

Clearance of Dead Plant Materials and Weeds – Section 4750 still allows for HOAs to apply rules and regulations requiring that “dead plant material and weeds, with the exception of straw, mulch, compost and other organic materials” that encourage vegetation and soil moisture retention, be regularly cleared from the backyard. A rule or regulation requiring such clearance may be successful in resolving your rodent and pest problem.

As indicated above, the right to have a personal food garden would not necessarily insulate a homeowner from his obligation to comply with related provisions of a HOA’s governing documents that serve as “reasonable restrictions” on the use of a yard for personal agriculture. For example, virtually every set of CC&Rs contains a provision prohibiting homeowner from conducting any activity on their property that poses a nuisance to neighboring homeowners. If the way in which a homeowner’s food garden is being maintained is resulting in a nuisance (i.e., attracting rats and other pest populations), the nuisance provision would likely constitute a “reasonable restriction” that the HOA may enforce against the homeowner.

In addition to the issues noted above, HOAs may, in some instances, have the authority to restrict food gardens that violate other provisions of the Association’s governing documents that serve as “reasonable restrictions” allowable under Section 4750 (i.e., a height limitation within the HOA’s landscaping standards may serve to prohibit crops that grow to unreasonable heights). HOA Boards that are encountering problems with food gardens should consult with their legal counsel for guidance as to how their governing documents may be tailored to address these types of issues.

To submit questions to the HOA attorneys at Tinnelly Law Group, click here.

The California Solar Rights Act (“Solar Rights Act”), found at Civil Code Sections 714 and 714.1, provides certain protections for homeowners seeking to install solar energy systems (i.e., solar panels) on their properties. The intent of the Solar Rights Act is to prohibit homeowners associations (“HOAs”) from broadly banning solar energy systems for aesthetic reasons–whether through an explicit ban or through onerous architectural restrictions that greatly reduce the performance of solar energy systems, or increase their costs. To that end, the Solar Rights Act renders void and unenforceable any provision of a HOA’s governing documents that “effectively prohibits or restricts the installation or use of a solar energy system.” Civ. Code § 714(a).

The Solar Rights Act does, however, allow for a HOA to place “reasonable restrictions” on the installation or use of solar energy systems. “Reasonable restrictions” are those which do not “significantly increase the costs of the system or significantly decrease its efficiency or specified performance.” Civ. Code § 714(b). In determining what constitutes a “significant” increase in cost or a “significant” decrease in performance in the context of solar panels, the Solar Rights act currently sets those thresholds at a $2,000 and 20%, respectively. Civ. Code § 714(d)(1)(B). Thus, under the text of the current Solar Rights Act, if complying with a provision in a HOA’s governing documents would, for example, only result in a 14% decrease in the system’s performance, that provision would be valid and enforceable. This issue was addressed in the Tesoro case that we blogged about in 2011.

However, the passage of AB 2188 (Muratsuchi) will serve to cut those thresholds in half. Effective January 1, 2015, AB 2188 will amend the term “significantly” to mean an amount not exceeding $1,000 or deceasing the efficiency of the system by more than 10%. AB 2188 will also reduce the thresholds for other types of solar energy systems (i.e., solar heating systems) in a similar fashion. AB 2188 further shortens the timeline for a HOA to review and approve/disapprove a solar energy system application (from 60 days down to 45 days), as well as modify various certification requirements affecting proposed systems.

The current language of the Solar Rights Act severely limits the degree to which a HOA may restrict the installation and use of solar energy systems. However, as a result of AB 2188 and its reduced cost increase/performance decrease thresholds, the ability for HOAs to restrict solar energy systems will be effectively nullified. With the increasing prevalence of solar panels, HOA Boards of Directors and management professionals must be aware of the Solar Rights Act and the likelihood that any substantive architectural restriction on the use of solar panels may not ultimately be enforceable.

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